No trades today because of personal reasons (holiday celebrations) and extra time with the family. In fact, I'm going to make it a trading tradition to not trade on the last trading day of the year before the New Year to just enjoy family and life.

In addition, all of my trades were posted real-time in the chat room. You can read today's chat room logs for details about each one of my trades via price action trading from entry to exit (e.g. time, price, contract size) along with price action commentary as the trade traversed to its completion...all archived @http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=124&t=1685

Also, posted below are direct links to information about my price action trade methodology and trading plan (there's a difference between the two) that enables me to identify key trading areas in the price action that represent changes in supply/demand and volatility along with being able to exploit these changes via WRB Analysis (wide range body/bar analysis). I'm primarily a day trader because it suits my personal lifestyle but I do occasionally swing trade and position trade. Simply, my trade method is applicable for position trading, swing trading and day trading.

##TheStrategyLab Chat Room is free. Members and I use the chat room to post WRB Analysis commentary, real-time trades and to post anything else related to trading. The chat room helps me tremendously in my own trading because I use it to document (journal) my thought process from trade to trade so that I can easily review at a later date my thoughts as I interacted with the markets...info I can not get from my broker statements. Also, this is not a signal calling chat room where a head trader tells you when to buy or sell. If you join the chat room and then you do not ask any questions about WRB Analysis in your own trading...the chat room will not be useful to you. Chat room access instructions @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=164

NEW YORK (CNNMoney)The bulls are ready to celebrate! Wall Street closed out a banner year Tuesday with more record closing highs.

The Dow Jones industrial average ended at an all-time high for the 52nd time this year. The S&P 500 also ended at a record high. The Nasdaq settled at its highest level in 13 years.

U.S. markets will be closed Wednesday for New Year's Day, and few shares were trading hands Tuesday.

Investors were tying up loose ends "before heading off to celebrate the end of what has been an exceptionally good year" for stocks, said Marc Chandler, head of currency strategy at Brown Brothers Harriman, in a note to clients.

The Dow and S&P 500 have soared in 2013, posting the biggest annual gains since the late 1990s. The Dow was up 26% and the S&P 500 gained more than 29%. The Nasdaq has surged nearly 40%, to highs not seen since 2000.

The major gauges were up by between 2% to 3% in December, the fourth month in a row that stocks have risen.

How we got here. Stocks have been in a bull market since 2009, but this year's rally has been substantial. Excluding a 5.7% drop from late May through late June, the S&P 500 has not suffered a decline of more than 5% all year.

The year started strong, thanks to a political deal to avoid the so-called fiscal cliff that helped clear some uncertainty about the federal budget.

The rally hit a speed bump in May after Federal Reserve chairman Ben Bernanke told Congress that the central bank might start to scale back its stimulus measures, a remark that sent the market's rumor mill spinning for months. But investors cheered when the Fed officially announced plans to taper its bond buying program earlier this month, taking it as a sign the economy is improving.

As stocks marched higher, investors poured billions into stock-based mutual funds and exchange-traded funds. In 2013, a total of $348.63 billion went into these funds, the largest ever annual inflow on record, according to TrimTabs.

Bad news for bonds. The year was not kind to the bond market. A record $72 billion flowed out of bond mutual funds in 2013 as investors braced for fewer Fed purchases.

The yield on the benchmark 10-year Treasury is trading above 3%, up from a low of 1.63% in early May. Bond yields rise when prices fall. But it was not just Treasuries that got hit. The Barclays U.S. Aggregate Bond Index (LAG), which tracks investment grade corporate bonds, fell 4% this year.

Gold also had a rough year. The precious metal fell 28% in 2013, marking the first down year for gold prices since 2000.

What's next? For now, many analysts believe stocks can move even higher in 2014, as a strengthening economy fuels continued growth in corporate profits. But predicting the future can be a treacherous endeavor. In January, analysts surveyed by CNNMoney predicted the S&P 500 would rise 4.5% in 2013 to end at 1,490. That was off by about 350 points.

Netflix takes the cake. The top performing stock in the S&P 500 was Netflix (NFLX), which soared nearly 300% this year. On Tuesday, Netflix disclosed that CEO Reed Hastings will see his scheduled base salary and stock options jump by 50% in 2014. Micron Technology (MU, Fortune 500), BestBuy (BBY, Fortune 500) and Delta (DAL, Fortune 500) were the other top gainers.

Newmont Mining (NEM, Fortune 500), one of the world's largest gold producers, was the worst performing S&P 500 stock. It fell more than 50% this year. Another mining company, Cliffs Natural Resources (CLF, Fortune 500), which is a big producer of coal, sank 32%.

Before it was kicked out of the S&P 500 last month, J.C. Penney (JCP, Fortune 500) was the biggest loser in the index. Shares of the troubled retailer have dropped almost 54% this year.

Global markets join the party. European markets also had a good year. Germany's DAX (DAX) led Europe's main stock markets, gaining 25% in 2013. London's FTSE 100 (UKX) rose more than 14% and the CAC 40 (CAC40) in Paris jumped 18% over the past 12 months -- the best year since 2009 for both indexes.

Japanese stocks were among the best performers in the world. Japan's benchmark Nikkei (N225)soared 57% this year as Prime Minister Shinzo Abe unleashed a massive monetary and fiscal stimulus program. It was the biggest annual rise for the Tokyo index in more than 40 years.

4:15 pm: [BRIEFING.COM] The major averages wrapped up a memorable year with a forgettable final session. The S&P 500 added 0.4%, extending its 2013 price return to 29.6%. Given its banner year, it was appropriate for the index to end 2013 at a fresh all-time high of 1848.35. The Dow Jones Industrial Average soared 26.5% in 2013 and ended at a record high of its own.

Although the Dow (+0.4%) and S&P 500 (+0.4%) saw comparable gains today, the Nasdaq (+0.5%) fared a bit better. That was the theme throughout the year as the tech-heavy index rallied 38.3%.

Similar to earlier sessions of the week, today's affair felt like it was taking place in slow motion until indices roared to fresh highs during the final hour. As a result, paltry intraday NYSE volume turned into a more respectable final tally of 558 million.

Elsewhere, the other commodity-related group-materials (+0.3%)-posted a modest gain as miners displayed strength. The Market Vectors Gold Miners ETF (GDX 21.13, +0.49) gained 2.7% as gold futures ended little changed at $1202.70/ozt. Unlike the S&P 500, the yellow metal will be happy to see the calendar turn to 2014 after seeing its price plunge 28.0% in 2013.

Outside of energy, the technology sector (+0.7%) was the only other noteworthy outperformer. The largest component, Apple (AAPL 561.02, +6.50), broke its four-day losing streak, gaining 1.2%.

With regard to momentum names, Twitter (TWTR 63.65, +3.14) rallied 5.2% after falling nearly 17.5% over the past two sessions while the top S&P 500 component of 2013, Netflix (NFLX 368.17, +1.18), added 0.3%, extending its 2013 gain to 297.3%. Fittingly, the S&P 500's top performer of 2013 resides in the strongest sector of the year, consumer discretionary, which finished with an annual gain of 41.0%.

On the countercyclical side, consumer staples (-0.1%), health care (-0.1%), and telecom services posted modest losses while utilities (+0.2%) finished slightly higher. Treasuries ended on their lows after spending the day in a steady downtrend. The 10-yr yield rose six basis points to 3.04%.

The October Case-Shiller 20-city Home Price Index rose 13.6% while a 13.8% increase had been expected by the Briefing.com consensus. This follows the previous month's increase of 13.2%. The Chicago PMI reading for December dropped to 59.1 from 63.0 while the consensus expected a decline to 60.0. The reported decrease was not too concerning given that readings above 60.0 are not sustainable for a long time. Production growth slowed as the related index fell to 57.9 from 64.3. The weakness stemmed from a softening in new orders growth, from 68.8 in November to 60.7 in December. The December Consumer Confidence Index increased to 78.1 from 72.0 while the consensus expected an increase to 77.1. Although the index posted a solid increase, the jump was a result of consumer attitudes returning to pre-government shutdown levels. In reality, confidence levels have essentially held steady since late summer.

There is no economic data on tomorrow's schedule as bond and equity markets will be closed for New Year's Day.

On Thursday, weekly initial claims will be released at 8:30 ET while November construction spending and the December ISM Index will both cross the wires at 10:00 ET.

With the year drawing to a close, we at Briefing.com would like to wish all of our readers a happy and healthy start to 2014.

Feb gold and Mar silver slipped to their respective session lows of $1181.40 per ounce and $18.72 per ounce in early morning pit trade but rallied sharply into positive territory following consumer confidence data Gold touched a session high of $1210.40 per ounce but then trended lower for the remainder of the session and settled 0.1% lower at $1202.70 per ounce. Silver brushed a session high of $19.82 per ounce but reversed back into the red and settled with a 1.3% loss at $19.38 per ounce Looking at the year, the gold continuous contract lost 28%, marking its first annual loss in 13 years and the sharpest decline since 1981 Silver's continuous contract fell ~ 36% in 2013 Feb crude oil spent all of today's pit trade in negative territory as the dollar index traded higher. The energy component brushed a session low of $98.15 per barrel in early morning action and settled with a 0.8% loss at $98.46 per barrel. The continuous contract settled the year 7% higher Feb natural gas trended lower in the red today. It retreated from its session high of $4.36 per MMBtu and settled 4.5% lower at $4.23 per MMBtu, just above its session low of $4.22 per MMBtu. The continuous contract booked a 24.6% gain for the year.

3:00 pm: [BRIEFING.COM] The S&P 500 has slipped back to its opening levels as the final session of the year enters its last hour. Although the S&P 500 has retreated from its session high, there won't be any tears shed for the index that is up 29.2% year-to-date.

Elsewhere, the Nasdaq sports a 2013 advance of 38.0% thanks to its composition, which includes a fair share of traditional tech shares as well as biotechnology. The technology sector has added 25.9% this year while biotechnology has enjoyed an even better stretch. The iShares Nasdaq Biotechnology ETF (IBB 226.41, -0.43) is off 0.2% today, but up more than 65.0% in 2013. On a related note, the health care sector is poised to add 38.4% this year. The sector will end 2013 in second place behind the consumer discretionary space, which is up 40.6% this year.

2:30 pm: [BRIEFING.COM] The S&P 500 (+0.3%) remains near levels it has held for the past three hours. Earlier, investors received three economic reports that did little to impact today's trading day. Most notably, the December Consumer Confidence Index returned to pre-government shutdown levels, increasing to 78.1 from 72.0 while the Briefing.com consensus expected an increase to 77.1.

On Thursday, participants will receive a handful of reports starting with an 8:30 ET release of weekly initial claims (Briefing.com consensus 333K). In addition, the November Construction Spending report (consensus 0.8%) and the December ISM Index (consensus 56.9) will both be released at 10:00 ET.

Friday's data will be limited to December auto and truck sales with manufacturers set to report their results throughout the session.

2:00 pm: [BRIEFING.COM] The S&P 500 remains near its recent levels as the quiet afternoon continues. Overall, 2013 has been a banner year for equities with the key indices gaining between 25.0% and 39.0%.

Furthermore, all ten S&P 500 sectors are on track to end the year in positive territory. The discretionary sector has had the best showing, and is up 40.8% this year. Fittingly, a discretionary component, Netflix (NFLX 366.66, -0.33), has outperformed all other S&P 500 members. Shares of video streaming services have added 296.6% this year.

On the downside, Newmont Mining (NEM 22.95, +0.02) will end the year behind the other 499 S&P 500 components with a 2013 loss of 50.6%.

1:25 pm: [BRIEFING.COM] Continued slippage in the major indices since hitting their intraday peak around 11:15 a.m. ET. It's more of a slow leak, though, than a flood of selling interest. To wit, the S&P 500 stands about two points below its intraday high.

By and large, today's market has been accented with a bullish bias, evidenced by an Advance-Decline line that favors advancers at the NYSE and Nasdaq by a comfortable 3-to-2 margin and most sectors sporting modest gains.

As a reminder, the stock market will be closed for trading on Wednesday. We would expect (and hope) to see a noticeable pickup in trading activity on Thursday, which will market the first trading session of 2014.

12:55 pm: [BRIEFING.COM] The S&P 500 holds a modest midday gain 0.3%, which puts the index on track to end 2013 with an eye-popping advance of 29.4%. For good measure, both the Dow Jones Industrial Average and the S&P 500 are poised to end the year at new record highs.

Not to be outdone, the tech-heavy Nasdaq (+0.4%), which remains a mere 960 points below its March 2000 high, is on pace to finish 2013 ahead of its peers with a 38.2% increase. Today, the index has received significant support from Apple (AAPL 560.30, +5.78), which trades higher by 1.0% after posting four consecutive losses.

Although the Nasdaq trades ahead of the other indices, the technology sector (+0.6%) has not been able to wrestle the lead away from energy (+0.7%).

The energy sector has led from the start with Phillips 66 (PSX 76.90, +2.18) contributing to the strength after Berkshire Hathaway (BRK.B 118.51, +0.47) agreed to acquire Phillips Specialty Products, which is a flow improver business. Interestingly, the energy sector has rallied despite crude oil trading lower by 0.7% at $98.60/bbl.

Meanwhile, the other commodity-related sector-materials-hovers just above its flat line. Miners have displayed noteworthy strength as the Market Vectors Gold Miners ETF (GDX 21.04, +0.40) trades up 1.9%. On a related note, gold futures have staged a reversal off their morning lows, and now trade higher by 0.3% at $1207.20/ozt.

Treasuries hover near their lows with the 10-yr yield up three basis points at 3.00%.

Today's economic data featured three reports:

The October Case-Shiller 20-city Home Price Index rose 13.6% while a 13.8% increase had been expected by the Briefing.com consensus. This follows the previous month's increase of 13.2%. The Chicago PMI reading for December dropped to 59.1 from 63.0 while the consensus expected a decline to 60.0. The reported decrease was not too concerning given that readings above 60.0 are not sustainable for a long time. Production growth slowed as the related index fell to 57.9 from 64.3. The weakness stemmed from a softening in new orders growth, from 68.8 in November to 60.7 in December. The December Consumer Confidence Index increased to 78.1 from 72.0 while the consensus expected an increase to 77.1. Although the index posted a solid increase, the jump was a result of consumer attitudes returning to pre-government shutdown levels. In reality, confidence levels have essentially held steady since late summer.

12:30 pm: [BRIEFING.COM] The S&P 500 has taken a couple steps back from its session high, but continues to hold the bulk of its gain. Cyclical sectors remain in the lead while three of four countercyclical groups have surrendered their modest gains. Consumer staples, health care, and telecom services are all back in the red while the utilities sector (+0.2%) remains just above its flat line.

On a separate note, Treasuries have been trapped in a downtrend since the overnight session. At this juncture, the 10-yr note is off its lows, but remains down nine ticks with its yield up three basis points at 3.01%.

12:00 pm: [BRIEFING.COM] Equities remain near their highs as the quiet session continues. To that end, the past hour saw only 40 million shares change hands on the floor of the New York Stock Exchange. This has brought today's total volume to 146 million.

Given the scarce participation, sector standing remains little changed from our earlier updates. The energy space (+0.7%) remains in the lead while the largest S&P 500 sector-technology (+0.6%)-occupies the second spot.

The technology sector has received support from its largest component, Apple (AAPL 561.18, +6.66), which trades higher by 1.2% after logging four consecutive losses. Elsewhere, shares of Twitter (TWTR 64.65, +4.14) are enduring yet another volatile session. The stock trades higher by 6.8% after losing 17.5% over the past two sessions. As a result of today's gain, the social media stock has extended its December advance to 55.6%.

11:30 am: [BRIEFING.COM] Recent action saw the major averages continue their slow climb. The S&P 500 now trades with a modest gain of 0.4% as all ten sectors hover in the red.

The energy sector (+0.7%) has padded its lead even as crude oil continues to hover near its lowest level of the day. The energy component trades lower by 0.8% at $98.45/bbl.

Elsewhere, the other commodity-linked group-materials (+0.2%)-trails the remaining cyclical sectors. The underperformance comes despite relative strength among miners and steelmakers. The Market Vectors Steel ETF (SLX 49.68, +0.13) is higher by 0.3% and the Market Vectors Gold Miners ETF (GDX 20.96, +0.32) trades up 1.6% while gold futures display a gain of 0.4%. The yellow metal trades near $1208.80/ozt after falling to $1185.00/ozt earlier this morning.

10:55 am: [BRIEFING.COM] The major averages hover near their best levels of the session with the tech-heavy Nasdaq (+0.3%) maintaining its lead over its peers. Today's session was not expected to see much participation, and that expectation is being fulfilled as NYSE volume just recently crossed the 100 million mark.

So far, cyclical sectors have had a better showing than their defensive counterparts. Energy (+0.6%) and technology (+0.4%) sit in the lead while financials (+0.3%) follow not far behind. Meanwhile, the largest defensive sector, health care, trades lower by 0.1%.

10:30 am: [BRIEFING.COM]

Volatile morning... commodities were mostly lower across the board this morning, except for sugar futures, ethanol, cotton, lumber, heating oil, live cattle and feeder cattle Gold and silver tanked in early morning action, but have since surged off its morning lows, erasing all losses and hitting new highs for the day Feb gold is now +0.5% at $1210.10/oz, Mar silver is +0.4% at $19.69/oz. In the energy space, crude oil has been recovering off its LoD, but natural gas has continued to extend losses and just hit a new LoD Feb crude fell as low as $98.15/barrel and is now -0.5% at $98.76/barrel. Feb nat gas is currently -2.6% at $4.31/MMBtu

10:00 am: [BRIEFING.COM] The major averages continue to hover near their opening highs.

The consumer confidence reading for December came in at 78.1 while economists polled by Briefing.com expected the survey to come in at 77.1. This follows the prior month's revised reading of 72.0 (from 70.4).

9:45 am: [BRIEFING.COM] The major averages registered opening gains with the Nasdaq (+0.2%) pacing the early advance.

The early strength of the tech-heavy index is translating into outperformance for the technology sector (+0.3%), which can be found among the leaders. In addition to technology, financials (+0.2%) and industrials (+0.3%) have also contributed to the opening advance.

Economic data this morning was limited to the October Case-Shiller 20-city Index, which rose 13.6%. With little corporate news of note, investors will have two more economic reports to digest this morning. On that note, the Chicago PMI report for December will be released at 9:45 ET (Briefing.com consensus 60) while December Consumer Confidence (consensus 77.1) will cross the wires at 10:00 ET.

Treasuries have spent the entire overnight session in the red, where they remain at this juncture. The 10-yr yield is higher by two basis points at 2.99%.

European markets display modest gains as the quiet session heads towards its close. There was no economic data of note released today. In news, Spain has formally exited the bailout program provided by the European Stability Mechanism.

Great Britain's FTSE trades higher by 0.3% with consumer names displaying strength. Carnival, easyJet, and Persimmon are all up between 1.1% and 1.7%. In France, the CAC holds an advance of 0.5% as 37 of 40 components register gains. Unibail-Rodamco leads with a gain of 1.6%. In Germany, the DAX is closed.

European markets display modest gains. France's CAC +0.3%, Great Britain's FTSE +0.3%, and Germany's DAX is closed. There was no economic data of note released today. Among news of note: Spain has made a formal exit from the bailout program provided by the European Stability Mechanism.

Investors’ 12-year love affair with gold ended in 2013 as they abandoned the precious metal for stock markets in the world’s developed economies, lifting global share prices by the most in four years.

While the Standard & Poor’s 500 Index (SPX) surged to a record in the broadest-ever advance and bonds worldwide lost money for the first time since 1999, it was the 28 percent plunge in gold, the worst in more than three decades, that stunned investors the most, according to Quincy Krosby, a market strategist at Prudential Financial Inc.

“Investors were heartbroken by gold,” Krosby, whose firm oversees more than $1 trillion, said in a telephone interview from Newark, New Jersey. “The selloff was one of the deepest purges in an asset class that I’ve seen. They went into gold because they saw the momentum continuing. Until it stopped. And it stopped violently.”

Demand for bullion as a preserver of wealth collapsed as the global economy showed signs of improving and central bank stimulus, led by the Federal Reserve, failed to ignite the runaway inflation that billionaire hedge fund manager John Paulson and other gold buyers anticipated. Instead, investors poured into equities, spurring a 20 percent advance in the MSCI All-Country World Index.

Gold had gained more than 600 percent from the start of 2001 to its peak of $1,923.70 an ounce in September 2011. The rally accelerated after the Fed dropped interest rates close to zero in 2008 and began its unprecedented bond buying, which flooded the U.S. economy with more than $3 trillion and raised the specter a weakening dollar would accelerate inflation.

Gold Exodus

The decline in gold in 2013, which pushed its price to $1,202.30, was the first annual drop since 2000 and the deepest since 1981. Gold futures in New York closed at a three-year low on Dec. 19, a day after the Fed said it would curtail stimulus as the U.S. economy strengthened and joblessness decreased.

Investors pulled $38.6 billion from gold funds in 2013, the most in data going back through 2000, according to EPFR Global, a research company. Paulson, the largest holder in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, said on Nov. 20 that he personally wouldn’t invest more money into his own gold fund because it’s not clear when inflation will quicken. U.S. consumer prices were unchanged in November after a 0.1 percent drop the prior month.

Billionaire George Soros sold his entire stake in the SPDR Gold Trust in the second quarter, according to a filing with the U.S. Securities and Exchange Commission.

Global Stimulus

Global growth, buoyed as central banks around the world suppressed borrowing costs, rebounded in the third quarter to its fastest pace since the first three months of 2012.

In April, the Bank of Japan started buying 7.5 trillion yen ($78.6 billion) of bonds a month to fuel lending and spending in the world’s third-biggest economy. The euro area exited its longest-ever recession after the European Central Bank President Mario Draghi pledged to do “whatever it takes” to keep the region from fracturing and dropped its benchmark rate to a record 0.25 percent in November.

In the U.S., the Fed said last month it would reduce its monthly bond purchases to $75 billion from $85 billion. The world’s largest economy expanded in the third quarter at a 4.1 percent annualized rate, the fastest growth since 2011.

Evidence that the U.S. is finally recovering from the worst financial crisis since the Great Depression prompted investors to embrace equities. The S&P 500 rose 30 percent for the best year since 1997 and surpassed 1,800 for the first time as data on housing and jobs improved.

Broadest Advance

Home prices in 20 U.S. cities rose by the most in more than seven years in October from a year earlier, the S&P/Case-Shiller index showed yesterday, while the unemployment rate fell to a five-year low of 7 percent last month.

A total of 460 stocks in the S&P 500 advanced in 2013, the most since at least 1990, data compiled by Bloomberg show. Netflix Inc. (NFLX), Micron Technology Inc. and Best Buy Co. more than tripled to lead the gains as all 10 industry groups rose in 2013. Consumer-discretionary, health-care, industrial and financial companies all jumped more than 30 percent.

The advance attracted investors to stock funds. They deposited $140 billion into U.S. equity exchange-traded funds last year, more than double the total from 2012, according to data compiled by Bloomberg. Inflows to bond ETFs plummeted 78 percent to $10 billion, the data show.

Winners, Losers

“As the Fed announced its intent to reduce asset purchases, you really came up with one game in town,” said Robert Pavlik, New York-based chief market strategist at Banyan Partners LLC, which manages about $4.5 billion. “There was really nothing else for investors to do with their money” than put their money into equities.

The MSCI All-Country World Index of 44 markets rallied for the biggest gain since 2009. Stock indexes in all 24 developed countries rose and 11 recorded advances of more than 20 percent, including Greece’s ASE Index and Germany’s DAX Index.

Japanese stocks climbed the most among industrialized nations as confidence increased that Bank of Japan Governor Haruhiko Kuroda’s stimulus plan would end 15 years of deflation and that a weakening yen would boost profits for exporters.

The Topix index soared 51 percent for the biggest annual surge since 1999.

Developing countries accounted for the 10 worst-performing stock markets as the pace of China’s economic expansion slowed and speculation deepened that higher borrowing costs from Brazil to India would restrain growth.

Frontier Markets

The MSCI Emerging Markets Index declined 5 percent, the second annual loss in three years.

Peru’s Lima General Index, Turkey’s Borsa Istanbul National 100 Index and Brazil’s Ibovespa all plunged more than 25 percent in dollar terms, the worst among 94 equity benchmark indexes tracked by Bloomberg globally.

The MSCI Frontier Markets Index, which measures stocks from banks in Nigeria to telecommunications providers in Egypt, climbed 21 percent in 2013, outpacing the broader emerging market index by the most since 2005.

Bond investors suffered the first declines in more than a decade, leaving holders that reaped a 24 percent return over the prior four years with a 0.26 percent annual loss as of Dec. 30.

Gains of 1.7 percent through the first four months of 2013 evaporated as investors unloaded debt securities in anticipation the Fed would curtail its own bond purchases.

Bond Rout

Average yields on $45 trillion of debt, which includes U.S. Treasuries, Japanese government bonds and worldwide corporate debentures, climbed from a record-low 1.51 percent in May to 2.1 percent as of Dec. 30, according to Bank of America Merrill Lynch’s Global Broad Market Index.

The jump was the first annual increase in global borrowing costs in seven years. U.S. government bonds of all maturities slumped 3.2 percent, the first decline since Treasuries posted an unprecedented 3.7 percent loss in 2009.

Yields on the benchmark 10-year note, used to help set interest rates on everything from car loans to mortgages, rose 1.27 percentage points, the most in four years, to end 2013 at 3.03 percent. Based on the median estimate of 64 forecasters surveyed by Bloomberg, 10-year yields will increase to 3.38 percent by the end of 2014.

Securities that are more sensitive to interest rates such as 30-year Treasuries fared among the worst, with U.S. government debt due in more than 10 years losing about 12 percent, index data from Bank of America show.

Junk Demand

Speculative-grade corporate bonds, which offered investors greater returns to compensate for the increased risk of default, rose 7.6 percent based on the Bloomberg Global High Yield Corporate Bond Index. (BHYC) Speculative-grade debt is rated below Baa3 by Moody’s Investors Service and BBB- by S&P.

The demand supported a record $1.5 trillion of company bond sales in the U.S. along with a ballooning market for junk-rated loans, which can offer protection from rising rates.

“You were really trying to hide out in market sectors that have historically shown some resilience in higher interest-rate environments,” said Lon Erickson, a Santa Fe, New Mexico-based money manager at Thornburg Investment Management Inc., which oversees about $90 billion and favors corporate debt. “People were flocking to things viewed as good places to avoid pure interest-rate risk.”

Peripheral Rally

Greece’s bonds had the biggest returns in 2013 among the 26 sovereign markets tracked by Bloomberg and the European Federation of Financial Analysts Societies, posting a 43 percent gain after doubling in 2012. Italy had the second-biggest increase, climbing 16 percent.

South Africa’s sovereign bonds suffered the biggest loss with a 19 percent decline, the data show.

The Bloomberg Dollar Index, which tracks the currency against 10 major peers, appreciated 3.5 percent, the most since 2008. The euro rose 4.1 percent in its best year versus the dollar since 2007, while the yen plunged by the most against the U.S. currency in 34 years.

The Argentine peso led declines among emerging-market currencies with a 25 percent drop as the central bank allowed the tender to depreciate faster in the face of estimated inflation exceeding 26 percent.

Indonesia’s rupiah, South Africa’s rand and Turkey’s lira declined at least 15 percent. Indonesia’s current account deficit in probably widened to 3.5 percent in 2013, which would be the worst in Asia and the deepest since at least 1991, according to economists’ estimates compiled by Bloomberg.

South Africa had the deepest current account shortfall since 2007, while Turkey’s 7.2 percent deficit is almost eight times the 0.93 percent average for eastern Europe and Africa, the estimates show.

“There haven’t been sufficient economic reform efforts in some of the emerging markets and the start of the Fed tapering cycle leaves them in very vulnerable positions as they have large funding requirements in their current accounts and fiscal shortfalls,” said Desmond Soon, a Singapore-based fund manager at Western Asset Management Co.

Record Crops

Favorable weather after the worst U.S. drought since the Dust Bowl caused corn prices to plunge. Futures fell 40 percent to $4.22 a bushel on the Chicago Board of Trade, the biggest drop since at least 1960, as the U.S. Department of Agriculture estimated domestic output jumped 30 percent to a record.

“We’re coming out of a year when we had pretty bare-bones supplies” of corn, said Shawn McCambridge, senior grains analyst with Jefferies Bache LLC in Chicago. “It looks like we’re going to have a record crop.”

The U.S. surplus on Aug. 31, the end of the marketing year, will be 1.792 billion bushels, up from 824 million a year earlier, the USDA said Dec. 10.

Wheat touched a 19-month low of $5.99 a bushel in Chicago yesterday and ended the year with a 22 percent drop. Soybeans slid 8.3 percent to $12.925 a bushel.

Natural gas had the biggest gain in the GSCI, rising 26 percent to $4.23 per million British thermal units on the New York Mercantile Exchange as a supply surplus of 17.7 percent above the five-year average in February plunged to a 9.2 percent deficit by December, the widest in data that starts in 2005.

“We’re seeing a lot more natural gas consumed for heat than in the past,” said John Kilduff, partner at Again Capital LLC, a New York-based hedge fund that’s focused on energy. “The big rally has occurred over the last month. The withdrawals from storage have been really large.”

West Texas Intermediate, the U.S. benchmark oil contract, also rose, advancing 7.2 percent on the New York Mercantile Exchange, to $98.42 a barrel, the largest increase since 2011.

A boom in U.S. oil production kept domestic prices cheaper than international grades, boosting demand from U.S. refiners and pushing fuel exports to a record high.

Brent futures traded on the ICE Futures Europe exchange in London, a benchmark price for more than half the world’s oil, fell 0.3 percent to $110.80 a barrel last year.

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